Water Sector / Sound Global: Could potentially see some trading interests. Following Standard Chartered recent water report, Nomura initiates sector report on the water industry, noting that increased earnings visibility and inexpensive valuations will drive continud re-rating of China water and environmental stocks……
Highlights abt 400+ Chinese cities suffer water shortages and pollution and expect further policy push by the Chinese govt to promote capacity investment, which could potentially lead to industry growing at 20% CAGR over 2010-2015F…..
Among the SG Water players, broker likes Sound Global, with TP of HK7.40 / S$1.25. Notes that grp is an emerging play on waterwater treatment with a substantial valuation discount to peers (11x P/E vs peers 16-19x). With recent dual listing in HK and transition into an integrated waterplay, grp has strong potential for a re-rating and has further upside…..
Technically share price appears to be on an uptrend with stochastics and RSI hooking upwards. Near term resistance at $0.915 and support at $0.82 (20Day MA)
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